Fitch Assigns Ratings To Dime Bancorp Inc. And Subsidiary
12 December 2000
Fitch Assigns Ratings To Dime Bancorp Inc. And Subsidiary
NEW YORK--Dec. 12, 2000--Fitch, the international rating agency, assigns its long-term rating of 'BBB' to Dime Bancorp and its principal operating subsidiary The Dime Savings Bank of New York FSB.Fitch also assigns its long-term deposit obligation rating of 'BBB+' and short-term deposit obligation of 'F2' to The Dime Savings Bank of New York FSB. At the same time, the existing individual ratings of 'B/C', short-term ratings of 'F2', and support ratings of '5' for both entities are affirmed. The Rating Outlook is Stable.
Our ratings are based on the prominent banking position Dime maintains in New York City and its suburbs, a comparatively low risk asset mix, and through North American Mortgage, a national mortgage banking platform, which combined, provide a good measure of stability to financial performance measures.
Dime, already the largest thrift in its markets, has in recent years been focused on building its mortgage banking business and transforming the franchise into that of a community bank with expanded products and services to consumer and business clientele.
While the former goal was largely achieved through the acquisition of North American Mortgage in 1997, the latter goal is being accomplished through organic efforts and small acquisitions.
Towards this end, Dime purchased an automobile lending business and a commercial branch network on Long Island, but most significantly, entered into a merger agreement in September 1999 with a local commercial bank.
This announcement set the stage for a series of major corporate developments, including the termination of the merger proposal which itself came on the heels of a hostile acquisition bid by another local competitor.
Dime appears to have successfully fended off this unwanted suitor with the sale of a large block of stock to friendly, outside investors and the installation of a new Chairman.
In the aftermath of these events, Dime recorded large charges in 3Q00 as part of a balance sheet restructuring and cost reduction program. However, core financial performance, despite these nonrecurring charges, the merger distractions of the last fifteen months, as well as the industrywide downturn in mortgage banking and a less favorable operating environment generally, have been fairly stable.
Looking forward, despite the pressures of increasing shareholder returns and operating results, we believe that Dime will pursue these objectives through more aggressive balance sheet and capital management practices and by cost savings, and not by engaging in higher risk lending activities. Dime, in recent years, has been very risk averse, and its earning asset mix is still based in its traditional residential mortgage product.